Subcommittee on Fisheries Wildlife and Water
Endangered Species Act and Incentives for Private Landowners

Wednesday, July 13, 2005

Michael Bean
Environmental Defense

The goals of the Endangered Species Act are among the nation’s most noble and most important. If we attain them, we will leave our children and succeeding generations a rich legacy of diverse and abundant wildlife and the habitats that sustain it. As one who has devoted most of his professional life since graduating from Yale Law School in 1973 to the pursuit of these goals, I firmly believe that they are attainable. And yet, I must acknowledge that they will not be attained – indeed, almost certainly cannot be attained – without offering meaningful incentives to private landowners and others to enlist them more effectively in the task of conservation. In the testimony that follows, I will explain why incentives are essential, examine some of the experience to date with incentive mechanisms, and finally offer some recommendations for this subcommittee to consider.

Why Incentives for Conserving Endangered Species are Essential

Four unavoidable facts underscore the conclusion that incentives to private landowners are essential to achieving the goals of the Endangered Species Act. The first of these is that much of the remaining habitat, and much of the potentially restorable habitat, for endangered species is found on private land. Indeed, many endangered species have most of their habitat on private land, and some have all of it there. Take, for example, North America’s smallest turtle, the bog turtle, a threatened species that occurs in at least three of the states represented on this subcommittee: Mrs. Clinton’s state of New York, Mr. Lautenberg’s state of New Jersey, and Mr. Lieberman’s state of Connecticut. Almost all the sites where this species occurs are on private land; virtually none are on public land, particularly federal land. Thus, if we are to conserve this species (and many others like it), we will need to do so on land that is largely in private ownership.

The second unavoidable fact is that many endangered species cannot be conserved simply by putting a fence around their habitats and declaring them off limits to disturbance. Instead, those species – and their habitats – need to be actively managed to sustain them over time. The example of the bog turtle illustrates this point as well. It occurs in early successional, grass- and sedge-dominated wet meadow habitats that are generally sunny and have few trees or other tall vegetation. Historically, these were likely created and sustained by the herds of large native grazing animals that formerly occurred in the Northeast, including elk and bison. More recently, grazing by cows and other domestic livestock has kept many of these sites in the open, sunny condition needed by the bog turtle. Remove the grazing animals, however, and these sites are quickly invaded by red maples and by aggressive exotic species such as purple loosestrife and multiflora rose. These invaders transform sunny grass- and sedge-dominated wet meadow habitats hospitable to bog turtles into heavily shaded wetlands that are inhospitable to bog turtles. Thus, without purposeful management to control invasive plants, the habitats that support bog turtles today will soon cease to do so, as many have done in recent decades – not due to development, but to lack of management.

Let me offer as another example the red-cockaded woodpecker, which also occurs in at least three of the states represented on this subcommittee: Mr. DeMint’s state of South Carolina, Mr. Vitter’s state of Louisiana, and Mr. Warner’s state of Virginia. Its habitat is characterized by older pine forests of the Southeast with little or no hardwood understory. Historically, the hardwood understory in these forests was kept to a minimum by frequent lightening-caused fires that would burn quickly through the grassy understory. Those fires would kill most of the hardwoods, but were actually good for the fire-tolerant longleaf pine trees, which not only typically survived the fires, but actually needed fire to aid the germination of their seeds. This natural cycle of frequent low-intensity fires has been dramatically altered as a result of the network of roads and other developments that act as barriers to the movement of fire across the landscape. Now, without prescribed burning or other purposeful management to control the hardwood understory, the relatively open and savanna-like pine forests that support red-cockaded woodpeckers inevitably become dense, mixed pine and hardwood forests inhospitable to red-cockaded woodpeckers. Thus, without prescribed fire or other purposeful management, the forest habitats that support this emblematic species of the Southeast will cease to do so, as many have done in recent decades – not due to development, but to lack of management.

The third unavoidable fact is that although purposeful management is clearly needed to maintain and improve the status of not just the bog turtle and the red-cockaded woodpecker, but of a great many other endangered or threatened species, there is nothing in the Endangered Species Act that compels it. The focus of the Act is on prohibiting harmful activities, backed up by the threat of severe penalties, not on eliciting beneficial activities that could improve upon the status quo. Thus, the developer in New York or New Jersey who fills a wetland occupied by bog turtles potentially faces a large fine and a jail sentence for doing so. But the landowner who stands passively by while the bog turtle wetland on his property is overtaken by invasive trees and shrubs does nothing that the law prohibits. Yet, in both cases, the end result is the same – bog turtles will cease to occupy the site. Thus, to secure the needed active management, not only is the carrot better than the stick, but in reality there is no stick.

The final unavoidable fact is quite simple: the purposeful management needed to sustain and improve species like the bog turtle and the red-cockaded woodpecker is virtually never free. Controlling hardwood understory in Southeastern pine forests through prescribed burning is the least costly method of doing so. However, in many formerly rural areas that are now part of the rural-urban interface, the proximity of development precludes the use of fire. The alternatives of mechanical or chemical control of hardwoods are much more expensive. In the Northeast, as a result of the decline of animal agriculture, people with chain saws, shears, and herbicides often have to do the job that cows or goats formerly did. Further, there is often no reason for landowners to engage in such management practices other than to create or maintain habitat for rare species. Thus, unless one expects that landowners will incur costs to carry out management activities that are neither compelled by law nor necessitated by other land use objectives, there is no reason to believe that the goal of recovering rare species that occur largely on private land and require active management will ever be achieved without incentives to do so.

I said earlier that there were four unavoidable facts that underlie the need for incentives. There is a fifth fact that needs discussion as well, though it is no longer an unavoidable one. It is simply this. The landowner who, despite the cost and despite the lack of any legal compulsion to do so, voluntarily restores or improves habitat for endangered species on his land once faced an unfortunate dilemma. The landowner who undertook such voluntary measures was likely to incur additional regulatory restrictions on the use of his land once endangered species began to use the restored or improved habitat. That dilemma can now be avoided through the use of Safe Harbor Agreements, under which landowners undertake voluntary restoration actions without incurring added regulatory liabilities. These agreements were an innovation begun during the tenure of Bruce Babbitt at the Interior Department, and they have embraced by his successor, Gale Norton, as well. In Mr. DeMint’s state of South Carolina, over a hundred landowners who together own some 400,000 acres of forest land are participating in Safe Harbor Agreements for the red-cockaded woodpecker. There are also Safe Harbor Agreements for this species in several other states, including Virginia and Louisiana. In New York, The Nature Conservancy has been working to develop a Safe Harbor Agreement for private landowners in the Albany area for an endangered butterfly, the Karner blue butterfly. In the ten years since the first Safe Harbor Agreement was developed, these agreements have shown themselves to be an effective way of overcoming an unintended regulatory disincentive to conservation, one that many landowners have embraced and one that has produced clear benefits for species. As I will note in the recommendations appended to this testimony, however, much more needs to be done to realize the full potential of this promising new conservation tool.

How to Improve the Use of Incentives in the Federal Endangered Species Program

What the Endangered Species Act says about incentives is … practically nothing. It uses the word only once, and then only in the statement of congressional findings in Section 2. There Congress finds that “a system of incentives” is “key to meeting the Nation’s international commitments” and safeguarding its living natural heritage. That is the only mention of incentives anywhere in the Act, and its meaning is decidedly opaque. Unfortunately, after finding that incentives were important, Congress did almost nothing in the Act to create them. Thus, the incentives for conserving endangered species that currently exist are either administratively created (such as Safe Harbor Agreements, the Private Stewardship Grants Program, and the Landowner Incentives Program), or have their basis in other laws that serve broader environmental purposes.

In thinking about how to improve the use of incentives in the federal endangered species program, there are at least three questions that are worth asking. First, can existing, broad purpose landowner incentive programs be administered to produce greater benefits for imperiled species? Second, are new incentive programs needed specifically for endangered species purposes? Finally, what needs to be done to ensure that regulatory policies do not undermine economic incentive policies?

The good news is that there already exist a number of programs that offer economic incentives to landowners for land stewardship purposes broad enough to encompass endangered species conservation. Most of those programs – and the most generously funded of these programs – are administered by the Department of Agriculture, however, rather than the Department of Interior, and the potential of these programs to be administered so as to achieve endangered species benefits has been largely unrealized. There is clear need for the USDA agencies that administer these Farm Bill programs and for the Interior and Commerce Department agencies that administer the endangered species program to work together much more closely. By doing so, it should be possible to accomplish the broad environmental goals of the Farm Bill programs while simultaneously furthering the more specific goals of the endangered species program.

Let me illustrate the need for greater coordination with an example from Committee Chairman Inhofe’s state of Oklahoma. The Conservation Reserve Program pays farmers to take cropland out of annual crop production and to plant it with perennial grass or tree cover so as to reduce soil erosion and achieve other environmental benefits. In Oklahoma, thousands of acres of former cropland have been planted in grasses under this program. The soil erosion benefits have been substantial. However, most of the initial plantings were of non-native grasses, which are of little or no habitat value for the lesser prairie chicken, a species that is now a candidate for addition to the endangered species list. Had the same acres been planted in native grasses, the same soil erosion benefits would have been achieved, and the lesser prairie chicken would have benefited as well, possibly to the extent that it would no longer be a candidate for endangered listing.

Missed conservation opportunities like the prairie chicken example are all too common. There are also occasional examples of Farm Bill conservation programs working at cross purposes with the endangered species program. In Pennsylvania, for example, Farm Bill dollars have gone to encourage tree planting in riparian corridors. That is generally a good thing, but some of the areas planted have been potential bog turtle habitat. As discussed earlier, trees should not be planted in bog turtle habitat, but instead need to be removed from it. Better coordination among the agencies is clearly needed, both to ensure that important conservation opportunities are not missed, and to ensure that agency efforts are not working at cross purposes.

There are also some very encouraging examples of what can happen when efforts are made to align Farm Bill and endangered species program objectives. This is particularly true where Natural Resource Conservation Service state biologists have taken the initiative and focused resources on rare species. In New York, for example, the NRCS has provided critical funding for a number of bog turtle restoration efforts. NRCS State Biologist Mike Townsend deserves recognition for his enthusiastic support of this initiative. In neighboring New Jersey, NRCS’s Tim Dunne has provided cost-share assistance for many bog turtle restoration projects through the Wildlife Habitat Incentives Program. Recently, NRCS announced the availability of a half million dollars each of Wetlands Reserve Enhancement Program funds for restoration efforts targeting habitat of the bog turtle and the recently rediscovered ivory billed woodpecker. These examples illustrate the potential for real synergy between Farm Bill conservation programs and the endangered species program – if only the responsible agencies will make a concerted effort to find these opportunities.

This subcommittee can, I think, play a very useful role in bringing that about. Working in concert with the Forestry, Conservation and Rural Revitalization Subcommittee of the Senate Agriculture Committee, whose Chairman, Senator Crapo, has a strong interest in improving the performance of the endangered species program, you can ask the agencies involved to provide you with what they see as the best opportunities to work together to further the conservation of endangered and other imperiled species – what species, in what locations, using what programs? Their answer will go a long way toward answering the first question posed above: can existing, broad purpose landowner incentive programs be administered to produce greater benefits for imperiled species?

Only with a clear answer to that question can one begin to assess the second question, whether new incentive programs are needed specifically for endangered species. Even if one could fully harness the potential of existing broader-purpose incentive programs to serve endangered species objectives, it is likely that new authority will be desirable. This is in part because existing programs have eligibility requirements that limit their applicability but especially because most existing incentive programs are simply cost-sharing programs, in which the program pays for a portion of the cost of implementing a conservation practice, and the landowner pays the remaining portion. The rationale behind such cost-sharing programs is that there are certain conservation practices that produce both public and private benefits, but the private benefits to the landowner are frequently too small to justify the full expense of implementing the practice. By sharing the cost of implementing these practices, these programs make possible practices, the expense of which would not otherwise be justifiable to the landowner. However, as noted earlier, often the conservation practices needed for endangered species have no independent value to the landowner; they do not increase production, reduce the costs of production, or otherwise further landowner objectives. In such cases, payments that equal the costs of implementing the conservation practice are likely to be needed, not partial cost-share. And real incentive payments that go above and beyond restoration costs are needed as well, at least if the goal is to engage more than the most ardent conservationists among landowners.

There is at least one existing program that offers incentive payments above and beyond cost-sharing assistance, USDA’s Environmental Quality Incentives Program (EQIP). Moreover, one of the four national priorities for EQIP is the conservation of at-risk species. To date, however, EQIP has done little to address this national priority, for at least three reasons. First, in most states the criteria for ranking competing projects give a higher priority to run-of-the-mill wildlife conservation projects that are appended to large projects with other purposes, such as construction of waste storage facilities, than to truly ambitious – but freestanding – conservation projects for imperiled species. In a few states, including North Carolina and Utah, a portion of EQIP funds have been allocated specifically for conservation projects for at-risk species. This approach ensures that the merits of wildlife conservation projects are compared directly with those of other wildlife conservation projects, regardless of whether they are appended to a waste storage facility or not.

The second reason that EQIP has thus far done little to address its stated national priority of conserving at-risk species is that little use has been made of the authority to provide incentive payments, above and beyond cost-share assistance. Finally, there has thus far been no real effort to integrate Safe Harbor assurances into EQIP (or, for that matter, other conservation assistance programs). Without that integration of assurances, landowner demand for conservation assistance dollars to carry out projects benefiting endangered species will be modest.

The failure to integrate landowner assurances into EQIP and other conservation assistance programs illustrates how regulatory policies can undermine economic incentive policies. The problem, however, is broader than simply the failure to integrate regulatory assurances into conservation assistance programs. Two years ago, I wrote a highly critical paper in which, after acknowledging some encouraging results from initial implementation of a new set of incentive-based conservation tools, I said the following:

“Despite these impressive initial indications, it is hard to avoid the conclusion that the record of accomplishment with these new conservation tools may be no more inspiring than the record with the old tools unless a number of self-imposed obstacles to success are removed. Those obstacles … are self-imposed because they do not inhere in the law itself, but are instead the product of an unimaginative, process-preoccupied, and ultimately self-defeating implementation that discourages and deters opportunities for tangible, on-the-ground improvement. These debilitating constraints have no partisan or ideological provenance; they have stifled effective conservation efforts for endangered species in both Democratic and Republican administrations, and will continue to do so until they are overcome.”

That paper attracted the attention of many in the Fish and Wildlife Service, and led to a series of efforts within that agency to explore these problems and their potential solutions. It has not, however, produced any significant changes. While I would enthusiastically support any new measure this subcommittee might propose to create incentives for conserving endangered species, I would also urge the subcommittee to put its influence behind efforts to prod the Service and NOAA Fisheries to make a series of administrative changes that would remove some of the self-imposed obstacles to success that hinder the incentive-based tools that already exist. Appended to this testimony is a list of some of the problems that can be overcome administratively, and some suggestions for how to overcome them. The subcommittee could perform a very useful service by pressing the agencies either to implement these suggestions or to devise better solutions to the problems identified.

Conclusion

In conclusion, incentives work. They help rare species and they appeal to landowners. By utilizing them, we can make more conservation progress more quickly and with less conflict than we can without them. They are not a substitute for regulatory controls, which remain essential in some situations, particularly where strong development pressures threaten to eliminate all habitat values. In the working landscape of farms, ranches, and forest lands, however, incentives offer a highly useful means of engaging landowners as allies of conservation rather than its adversaries. Congress can and should expand the toolbox of incentive programs to further the recovery of endangered species. No less important, however, it should make every effort to ensure that existing incentive programs are used as effectively as possible to achieve that goal.